THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: We're learning right now about a new high-level request about to go forward to actually get more troops involved in Afghanistan. The story is unfolding exactly eight years after the 9/11 attacks that led to the war in Afghanistan.

Our Pentagon correspondent Barbara Starr is joining us now.

Barbara, what exactly are you hearing?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, as the debate rages in this town about sending more combat forces to the war, CNN is learning that Defense Secretary Gates in the last two weeks has come to the conclusion that the threat from roadside bombs, those IEDs in Afghanistan that are killing so many U.S. troops, that the threat is so dire, he wants to send more forces to Afghanistan as quickly as possible to deal with this threat.

Now, this is separate from General McChrystal's long-expected plan that still is to be presented here in Washington about the need for more forces. What Secretary Gates is looking at, according to his spokesman Geoff Morrell is the urgent need to send more personnel that would be involved in route clearance, finding those IEDs, explosive ordnance teams that would blow them up, medevacs, medical personnel to deal with the growing number of U.S. wounded troops in the war, as well as intelligence personnel.

We spoke, very quickly, to another source who said that it's most likely this would total about 3,000 additional forces. Some of the units have already been identified by Pentagon planners. We don't believe that troops have been notified they will be going, all of this still to be taken to President Obama, but, already, it's looking like more troops will in fact be on the way to the war in Afghanistan -- Wolf.

BLITZER: It's interesting. It comes only within 24 hours after both Nancy Pelosi, and Carl Levin, the chairman of the Senate Armed Services Committee, said they're not very happy about this. Listen to what they have said.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE CHAIRMAN: ... should increase and accelerate our efforts to support the Afghan security forces in their efforts to become self-sufficient, delivering security to their nation, before we consider whether to increase U.S. combat forces above the levels already planned for the next few months. REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I don't think there's a great deal of support for sending more troops to Afghanistan in the country or in the Congress.

(END VIDEO CLIP)

BLITZER: It's interesting. A lot of Democrats don't want any more troops. There are 68,000 troops either there or about to be there. Another 3,000 would bring it up to 71,000. But there are plenty of Republicans who say, yes, do whatever it takes to get the job done.

It puts the president in an awkward situation.

STARR: It does indeed, Wolf. Let's play the numbers game for people just a little bit here.

You're absolutely right. Essentially, there is a ceiling, if you will, of 68,000 troops for Afghanistan right now. The president would have to approve something more than that.

What Secretary Gates is talking about, perhaps even more serious, is they urgently need these up to 3,000 additional forces for those 68,000 troops. The fact is, what has happened is, the belief is there aren't enough troops to protect what is already there. The IED threat, the roadside bomb threat so serious right now for the troops that are there, they have to get this extra protection force in there as fast as they can.

BLITZER: All right, Barbara Starr with the breaking news for us, thank you.

Meanwhile, there's a lot of finger-pointing going on right now about a U.S. Coast Guard security exercise that seemed all too real on this of all days, September 11. It played out on the Potomac River earlier this morning, not very far away from the Pentagon, where President Obama was then marking the attacks on America eight years ago.

Our homeland security correspondent, Jeanne Meserve, has followed this story and she's joining us now with more -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, it turned out to be a routine training exercise, but for a time it looked and sounded like it might be something more ominous.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): As President Obama attended ceremonies at the Pentagon commemorating the largest terror attacks ever on U.S. soil, a camera picked up boats darting and dodging in the nearby Potomac River, and this traffic was picked on a Coast Guard radio channel.

UNIDENTIFIED MALE: If you don't stop your vessel you will be fired upon. Stop your vessel immediately. If you don't slow down and stop your vessel, and leave our zone, you will be fired upon.

UNIDENTIFIED MALE: We have expended 10 rounds, the vessel is operating at stern. We're going to reassess the situation.

MESERVE: With Coast Guard headquarters providing no explanation, CNN began reporting what it saw and heard. Local and federal agencies responded to the scene. At nearby Reagan National Airport, air traffic controllers shut down flights for about 20 minutes as a precaution until the word came this was a drill.

VICE ADM. JOHN CURRIER, COAST GUARD CHIEF OF STAFF: No shots were fired. There was no suspect vessel. There was no criminal activity. This was a preplanned normal training exercise.

MESERVE: But there had been no notification to federal, state or local agencies. Even the Secret Service, although the president's motorcade crossed over the adjacent Memorial Bridge as the exercise was under way.

In April, a no-notice flight over New York City by a plane used as Air Force One sent panicked New Yorkers into the streets. It turned out only to be a photo shoot. Friday's events on the Potomac raised similar complaints.

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Let's be clear. There was no excuse for having done this when they did it. Second, to the extent that they decided to do it, it was done incompetently. They didn't follow their own internal process and procedures.

They didn't notify other federal agencies as best we can tell. They certainly didn't notify the media.

MESERVE: But White House Press Secretary Robert Gibbs faulted reporters for jumping too soon, saying, "If anybody was unnecessarily alarmed based on erroneous reporting that denoted that shots had been fired, I think everybody is apologetic about that."

(END VIDEOTAPE)

MESERVE: The Coast Guard says it's reviewing today's events to see what lessons can be learned. And Senator Susan Collins, ranking minority member on the Senate Homeland Security Committee, says see she will be looking into the timing, location and communications to see if this was the wrong time and the wrong place for a routine exercise -- Wolf.

BLITZER: All right, Jeanne, thank you.

We want our viewers right now to hear more of the Coast Guard's explanation of exactly what happened and why there was so much confusion about this training exercise.

(BEGIN VIDEO CLIP)

VICE ADMIRAL JOHN CURRIER, U.S. COAST GUARD CHIEF OF STAFF: What you see here is a loop between what actually happened, press reports, and the uncertainty that was generated by that because of the high profile of the press reports and the fact that other agencies due to that uncertainty reacted as they normally would.

And they dispatched units. And this is probably...

(CROSSTALK)

QUESTION: I notice you're not issuing an apology.

CURRIER: No, I am not issuing an apology, because although it's unfortunate that it escalated to this level, what you're seeing here is the result of a normal training exercise, such that when we have a threat or when we have a security issue in the national capital region, all agencies can come together under a secure communications protocol, and execute security operations very professionally and successfully.

To my knowledge, the information I have at this time there was no specific notification of state or local law enforcement agencies. The reason is that, just like when the D.C. Fire Department trains, they don't necessarily notify all other agencies.

This was a routine, low-profile, normal training exercise that happened to -- the radio intercept generated intense media coverage and interest, justifiably so. But I think what happened was, you saw this spiral out.

(END VIDEO CLIP)

BLITZER: All right, let me read to you a statement that CNN has released today. And I will read it exactly.

"CNN staff were monitoring local enforcement activity this morning, given the 9/11 anniversary. After hearing a U.S. Coast Guard radio transmission that a boat had breached a security zone on the Potomac River a short distance from the Pentagon, where the president had just attended a 9/11 anniversary ceremony, CNN contacted the Coast Guard public affairs office at the agency's headquarters. The Coast Guard spokeswoman said she was unaware of any activity taking place on the Potomac River.

"After hearing a further radio transmission about 10 rounds being expended and after reviewing video of rapid movement by Coast Guard vessels as the president's motorcade crossed the Memorial Bridge, CNN reported the story.

"Simultaneously, during a second phone call, the Coast Guard spokeswoman informed us that its National Command Center and other command posts knew nothing about any activity in the area."

Finally, the CNN statement says this: "Given the circumstances, it would have been irresponsible not to report on what we were hearing and seeing. As with any breaking news story, information is often fluid. And CNN updated the story with the official explanation from the Coast Guard as soon as it was provided." Let's talk about this with our CNN national security contributor Fran Townsend. She was a Bush homeland security adviser.

Fran, what's the most important lesson that we should learn from this unfortunate incident?

TOWNSEND: Wolf, to put it in a bumper sticker, when in doubt, put it out.

What we learned from this and from the flyover in Lower Manhattan is whether it's what the admiral sort of called a low-visibility exercise or it's a buzz -- a low fly over Lower Manhattan, when in doubt, put that information out. Put it out to state and local authorities, so they don't react, like FAA putting a ground stop on aircraft at Reagan today, or to the public and the media, so that you don't have information put out that people do feel the need to react to.

With all due respect to the admiral, he said when D.C. Fire Department has an exercise, they don't put out notification, that's right. But I'm just guessing that the D.C. Fire Department doesn't do their exercise on a 9/11 anniversary near a memorial where the president of the United States is at.

BLITZER: Yes. You see a bunch of Coast Guard vessels in the Potomac River -- I go along the Potomac River almost every day -- and you see guns mounted on those little boats, especially on 9/11, when people are nervous to begin with, you have to say to yourself, what's going on?

TOWNSEND: Right. That's right.

And, truthfully, rather than being -- what we're seeing is sort of typical, Wolf. The Coast Guard and the Department of Homeland Security are being very defensive about this, when the right answer is to say, you know what? In hindsight, this was not a good idea. This was bad to do on a day such as the 9/11 anniversary. We're going to look at this and understand how we made that mistake and we're going to fix it.

And this wouldn't have been the story it's become if they had just said that.

BLITZER: Yes. And I think that even within the Coast Guard, they should have told others, you know what, this is going on, because when that public affairs officer gets a call from CNN, what's going on, on the Potomac River, they s have said, well, look, don't get alarmed, it is just a training exercise. That would have made obviously some sense.

One year ago this week, the financial system of the United States came very close to collapsing. It began with the failure of Lehman Brothers, triggered the biggest government financial intervention in our history and that in fact may be what saved us.

Treasury Secretary Tim Geithner says the bailouts and the other actions taken by the government were absolutely necessary to keep the economy from going over a cliff. And while the worst is over, Geithner warns the recovery ahead will be slow and painful.

He expects continued high levels of unemployment and weak growth. This coming Monday, President Obama will be on Wall Street giving what the White House is calling a major speech here in New York City on the financial crisis. He will address what's been done so far and talk about what he thinks need to be done forward.

In the year since Lehman Brothers collapsed, the U.S. economy has taken quite a beating. The weeks and months that followed that event saw failures in the financial system, a government response that, at one time, seemed unimaginable, the bailout and the subsequent takeover of the world's largest insurer, AIG, a much larger than usual number of bank failures, the government taking a huge stake in huge institutions like Citibank, Bank of America, the government investing massive sums of money in two of the big three automakers, and of course that huge $780 billion economic stimulus package that was rammed through the Congress in the early days of the Obama administration.

The stock market tanked. But for those with a strong enough stomach to stay in, a recent six-month rally has recouped a lot of those losses. And many economists are now saying the greatest economic downturn since the Great Depression is ending.

Here's the question, though. How confident are you in this nation's financial system? Go to CNN.com/caffertyfile, and post a comment on my blog.

I have said it to you before. I don't think any of us will ever know how close we came to a real all-out Armageddon when Lehman Brothers went down.

BLITZER: Yes. We were looking at the abyss.

CAFFERTY: Very close, yes.

BLITZER: I think you're right. All right, Jack, thank you.

Was it financial advice for the oldest profession in the world? An assumed pump and a prostitute allegedly offered advice on how to set up a prostitution ring from a liberal political group, and it's all caught on tape. Some critics say you should know, if many senators and representatives would be killed in a terror attack, it would cripple the U.S. government. what is going on?

And claims that buried caskets were broken open at a cemetery and human skulls and other remains were dumped to make money. Could this happen to your loved ones at a cemetery near you?

(COMMERCIAL BREAK)

BLITZER: Workers with a grassroots community organization caught on tape allegedly giving advice on how to run a prostitution ring. The charge is scandalous enough, but it's even more explosive because it involved the controversial group known as ACORN. You may remember conservatives accused the group of voter registration fraud and emphasized its endorsement of President Obama.

ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT: Well, this seems to be the video that everyone is talking about. It appears two ACORN workers were caught on tape allegedly offering advice about how to set up a prostitution ring and evade the IRS.

(BEGIN VIDEOTAPE)

BOUDREAU (voice-over): The man who secretly recorded the video is an independent filmmaker named James O'Keefe. He's also a conservative activist. Remember, ACORN is a liberal community organizing group.

The undercover sting shows the pair approaching two women working at the ACORN office in Baltimore, Maryland. O'Keefe and a colleague posing as a prostitute are heard on the video asking for advice on how to set up a prostitution ring involving more than a dozen underage girls from El Salvador, girls 14, 15, 16 years old.

UNIDENTIFIED MALE: What if they're making money, because they're performing tricks, too?

UNIDENTIFIED FEMALE: If they're making money and they're under age, you shouldn't be letting nobody know anyway.

(LAUGHTER)

BOUDREAU: One of the workers told the pair they could declare some of the young girls as dependents to receive child tax credits. There was even a point in the video where a worker suggests that the woman posing as the prostitute refer to herself as a performing artist on tax forms and to stop calling herself a prostitute.

UNIDENTIFIED FEMALE: Performance arts. Let's see. Independent artist. You could be that. BOUDREAU: Republican Congressman Steve King of Iowa is calling for a full congressional and Justice Department investigation into the matter.

REP. STEVE KING (R), IOWA: We have got to audit them completely, every single affiliated corporation that they have. There needs to a Department of Justice complete forensic audit. We need to do congressional investigations. And we need to shut off every dime going to ACORN until such time as they can have a clean bill of health.

BOUDREAU: ACORN national spokesman Scott Levenson says, "The portrayal is false and defamatory and an attempt at gotcha journalism."

Levenson tells CNN that the filmmakers made similar efforts in Philadelphia. And in that case ACORN workers actually reported the filmmakers to the police. ACORN provided a copy of the police report.

Levenson also said he believes the video was -- quote -- "doctored" and that the group is considering legal action against the filmmakers. ACORN also says one of the workers -- quote -- "denies ever giving tax advice to people identifying themselves as a pimp and a prostitute."

Despite that denial, the chairwoman of the Baltimore chapter of ACORN says both workers have been fired.

SONJA MERCHANT, ACORN BALTIMORE: They did not follow the protocol of this organization. There's specific guidelines of what you can do when you do intake. And that wasn't followed. And so, you know, they were dismissed.

(END VIDEOTAPE)

BOUDREAU: We have reached out to those two workers and they have not yet called us back. Meanwhile, the filmmakers have posted another video allegedly showing a similar sting taking place at an ACORN office in Washington, D.C. ACORN's president and executive director released a statement this afternoon saying they were angry and appalled at the D.C. incident and that the two workers involved there have been fired as well -- Wolf.

BLITZER: Do we know, Abbie, if authorities are actually investigating or looking into this?

BOUDREAU: Of course that's one of the things that we have been looking into. We did reach out to the Baltimore Police Department. And they tell us at this time there is no investigation. Of course, any of this could change at any given moment. And who knows how many more tapes might just pop up?

BLITZER: All right, Abbie, stand by. We're going to see you in a few moments. You're working on another important for us, Abbie Boudreau.

Let's bring in our senior political correspondent, Candy Crowley.

Candy, it's striking to a lot of folks that this so-called sting operation was conducted by political activists, not necessarily law enforcement. What do you make of that?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: I make of it that the Internet has made investigative journalism and politics, mixed them all up and put them on YouTube.

What's happening here is that anybody can have a camera. Anybody can have a YouTube account. And anybody who has a particular point of view in politics can go out and try to prove that particular point of view.

I mean, we have seen -- so many times, Wolf, over the many elections that I have covered, we have always seen the oppo-research people that were at every stop with whatever candidate it was. They had cameras. Generally what happened was that was for the information of the campaign headquarters.

Sometimes, they would give it out to reporters, but it certainly wasn't this sort of the ability to go viral with something that made a particular candidate, lower organization in this case look bad.

So, what you have is a combination of politics, the ease of having a camera, and the ease of distributing it. And if I were a politician, and we can -- already the road is littered with them -- I would assume that every time I was outside or inside where there was someone that I didn't totally trust that whatever I was saying was being recorded.

And I would say the same is true of organizations like ACORN, which, as you know, in the past has been in some political push and pull, and that people need to be careful, because there's no putting the genie back in the bottle.

BLITZER: What a story this is.

All right, Candy, thanks very much for that -- Candy Crowley reporting.

Planning for a catastrophe. What if the entire Congress were wiped out? Eight years after the 9/11 terror attacks, critics say the backup plan in place is a failure.

Also, the congressman who shouted "You lie" at President Obama is now cashing in on his notoriety. We have the details of how much money he's raking in for his reelection campaign.

Plus, a cemetery accused of desecration, digging up bodies and scattering the parts. Our Special Investigations Unit discovers this isn't the first time the owners have faced these allegations.

(COMMERCIAL BREAK)

(NEWS BREAK) BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: Critics are warning that the so-called doomsday plan for Congress could leave the country without a functioning government if catastrophe strikes. We're looking at the worst-case scenario.

President Obama calling Americans to national service. He and the first lady spoke about all of that and more with "TIME" magazine's managing editor, Rick Stengel. And Rick is here to take us inside his joint interview with the president and the first lady.

Plus, hundreds of bodies allegedly desecrated by the very cemetery entrusted to care for them for eternity. CNN's Special Investigations Unit discovered this isn't the first time the cemetery owners have been accused -- all of this, plus the best political team on television.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

President Obama at the Pentagon today vowing to honor the victims of 9/11 by relentlessly pursuing terrorists. Eight years to the day after the terrorist attacks, the president laid a wreath and spoke of scars that will never entirely heal.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Eight Septembers have come and gone. Nearly 3,000 days have passed, almost one for each of those taken from us. But no turning of the season can diminish the pain and the loss of that day. No passage of time and no dark skies can ever dull the meaning of this moment.

So on this solemn day, at this sacred hour, once more we pause, once more we pray, as a nation and as a people.

(END VIDEO CLIP)

BLITZER: In New York, a moment of silence at the exact time when the first plane hit the World Trade Center and again when the second plane hit.

Family members and friends read the names of the dead as the bells tolled. The song "Amazing Grace" echoed through the field in Shanksville, Pennsylvania, where one of the hijacked planes went down. Nearly 3,000 people were killed in the al Qaeda attacks on America eight years ago today.

As we remember 9/11, one issue some are discussing, what would happen if the U.S. Congress were ever attacked?

Let's bring in CNN's Brian Todd. He's been looking at the so- called doomsday scenario -- Brian, what are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, there are clear plans for the president's replacement if he dies in a terrorist attack. But eight years after 9/11, critics say the legislative branch of government is still very vulnerable.

(BEGIN VIDEOTAPE)

TODD (voice-over): The doomed Flight 93 -- if not for the heroism of those on board, the Capitol could have been in charred ruins. There were hundreds of members of Congress inside the building and no backup plan to replace them quickly if anything happened.

Eight years later, critics say, Congress still doesn't have an adequate plan.

NORMAN ORNSTEIN, AMERICAN ENTERPRISE INSTITUTE: This is bipartisan failure.

TODD: Just after 9/11, Norman Ornstein helped establish the Continuity of Government Commission. Its mission -- pass an amendment calling for immediate emergency appointments if hundreds of House members or senators were either killed or incapacitated in an attack.

The effort failed. Instead, the House passed a plan calling for special elections within about a month-and-a-half of any attack. Ornstein says, realistically, it would take much longer to replace them. It's not that he's worried that without Congress government couldn't function.

(on camera): What could happen in that month and a half to four months, or even more, that really worries you?

ORNSTEIN: The attorney general could decide to round up half the country and put them in detention camps without anybody saying wait, hold on a minute here. The president could decide to go to war against four or five different countries -- maybe settling scores that had nothing to do with a terrorist attack -- without anybody saying, wait, you're not allowed to do that without Congress intervening.

TODD (voice-over): A clear line of succession covers the president's immediate replacement. In Congress, replacement senators can be appointed for those who have died, but senators who are incapacitated can still stay in office. But in the House, leaders like David Dreier and others believe that chamber should hold to its tradition of being directly elected by the people, no matter what.

REP. DAVID DREIER (R), CALIFORNIA, RULES COMMITTEE: There is no way that anyone should serve in the House of Representatives, because of its Constitutional history, by way of appointment. They should be quickly elected.

(END VIDEOTAPE)

TODD: Dreier says choosing your leaders is an important part of rebuilding after a catastrophe. Norm Ornstein argues that it's not feasible to have no House of Representatives at all until those elections can be held. And he says if you try to cram potentially several hundred elections in within just 45 days after the country has been devastated in an attack, the potential for chaos and fraud is enormous -- Wolf. BLITZER: Any hope, Brian, that Norm Ornstein's proposals are actually going to be enacted?

TODD: Well, he says that he's going to push for Congressional hearings, for a floor debate and a vote. But he says, unfortunately, it may just take another tragedy to shake the tree and get them to put in a plan to act more quickly to replace members of Congress.

BLITZER: Brian Todd, thanks very much for that report.

The congressman who shouted "You lie" at President Obama is speaking out once again -- this time online. Republican Joe Wilson of South Carolina has a new message for supporters and he put that message out there on YouTube. He's making money off of it, as well, for his reelection campaign.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, Congressman Wilson says in this video he was wrong to yell at the president. But, he says, on the topic of health care, don't expect me to be quiet.

Take a listen.

(BEGIN VIDEO CLIP)

REP. JOE WILSON (R), SOUTH CAROLINA: On these issues, I will not be muzzled. I will speak up and speak loudly against this risky plan. The supporters of...

(END VIDEO CLIP)

TATTON: In this fundraising video to his supporters, he says that liberals are trying to silence him as he attempts to speak out against what he calls a poorly conceived plan. And he's asking his supporters for cash on YouTube, on his Web site, on Twitter, in a fundraising e-mail.

And it appears to be working -- $200,000 raised by his campaign since Wednesday night -- quite a haul, until you compare it to this. The fundraising Web site on ActBlue for Rob Miller, his opponent, which is now about $800,000 and counting. The cash coming in there at about $7 per second -- Wolf.

BLITZER: Wow, amazing. All right. A lot of money in that Congressional district.

Thanks very much, Abbi.

A lawsuit alleges widespread desecration of gravesites in a Jewish cemetery in Los Angeles. We have some very disturbing information coming into THE SITUATION ROOM about the company named in the lawsuit.

Also, many economists say the recession is ending, but how confident are you that the problems in the financial system have really been fixed?

And Jeanne Moos with the Moost Unusual back story of a man who undressed and asked to kiss the actor, George Clooney, at the Venice Film Festival.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Imagine this -- you bury a loved one in their final resting place, then you hear claims that some cemetery workers are actually digging up the dead, dumping the remains, as part of a disturbing financial scheme. Those are among the allegations against one large cemetery.

ABBIE BOUDREAU, INVESTIGATIVE CORRESPONDENT: Well, Wolf, the allegations are gruesome. And CNN has been told it may have been going on for years.

Eden Memorial Park in Mission Hills, California, is one of the oldest and largest Jewish cemeteries in Los Angeles. The lawsuit filed on behalf of families whose loved ones are buried there claims graves were dug up and body parts were scattered and discarded.

(BEGIN VIDEOTAPE)

BOUDREAU: (voice-over): Claims of secretly breaking and opening buried caskets, dumping remains, including human skulls, and selling burial plots without actually having the space -- all to make more money. Those are just a few of the allegations made in a lawsuit filed Thursday in Los Angeles.

This is the cemetery in question. Eden Memorial Park has been around for 55 years.

MICHAEL AVENATTI, ATTORNEY: We allege that Eden Memorial Park and its management have been, for the better part of 15 years, engaging in improper -- improper burial practices, including the desecration of graves and the improper disposal of human remains.

BOUDREAU: The lawsuit is filed against the owners, Service Corporation International, based in Houston. SCI is the country's largest owner of cemeteries and funeral homes, with more than 2,000. According to the lawsuit, groundskeepers were secretly instructed to break concrete internment vaults that contained caskets, which were already buried, using backhoes.

The lawsuit alleges human remains would often fall out of the broken caskets and those body parts were then either scattered or thrown away. The reason they would break the concrete vaults is to make more room for new plots, according to the complaint, even though they had no more space available.

AVENATTI: We have uncovered evidence that the groundskeepers and others at Eden Memorial Park had been instructed to break off or break apart that concrete vault and in many times, that exposes human remains.

BOUDREAU: (on camera): So almost like -- it's like chipping away at the vault so that they could make room for a new plot?

AVENATTI: That -- that's exactly correct, Abbie. That's exactly what they've been doing for some time, according to the allegations in the complaint.

BOUDREAU: And do you know about how many victims' families we're talking about right now?

AVENATTI: We are still in the process of investigating the full extent of this. We have uncovered some evidence that suggests that it could be in excess of 500 decedents.

(END VIDEO TAPE)

BOUDREAU: This is not the first time Service Corporation International has faced allegations of digging up graves and moving bodies to make room for new remains. The company reached a $100 million settlement with families of victims whose remains were desecrated at Menorah Gardens in South Florida. SCI also reached a $14 million settlement with the state attorney general's office related to the same claims -- Wolf.

BLITZER: What did the cemetery's management say about all of this -- Abbie?

BOUDREAU: Well, first we spoke with Eden Park's manager, who then referred us to SCI. We finally talked to someone at SCI, a spokesperson there, who told us that the cemetery employees disclosed what they called burial issues in 2007, that SCI investigated and confirmed. She said four families with relatives buried at Eden Memorial Park were contacted about that investigation, but she could not immediately provide more details. As far as the lawsuit, she said the allegations are not valid.

So it -- it is a little confusing. Obviously, we're going to continue to learn a lot more about this.

And Jeanne Moos with the Moost Unusual back story of a man who undressed and asked to kiss the actor, George Clooney, at the Venice Film Festival.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Some Pakistanis are risking their lives to take on the Taliban in their own country, saying they won't allow the terrorists in.

CNN's Reza Sayah is there.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN CORRESPONDENT (voice-over): In Pakistan's Lower Dir Valley, this is what's waiting for the Taliban if they decide to trespass -- a Russian made heavy machine gun and hundreds of armed tribesmen, who call the Taliban the enemy. "We hate the Taliban," says tribal leader Malik Zaib Khan.

Major Hasnain Shah says the Pakistan Army has defeated the Taliban in Swat and surrounding areas and a key role has been that of lashkars -- local militias who've taken up arms against the Taliban.

UNIDENTIFIED MALE: They were really a great help in the battle.

SAYAH: After a two hour drive up the rugged mountains of Lower Dir and another half hour climb, we reach the headquarters of the Soltan Kheil Lashkar. Gunfire and cheers greet us -- the Pashtun way of saying welcome.

(on camera): The headquarters of this lashkar sits here in the Torman Pass (ph). To the east is the Swat Valley, which pretty much a few months ago was taken over by the Taliban. To the west sits the district of Lower Direct. The task of this lashkar is to preventive the Taliban from infiltrating the villages down there.

Five hundred tribesmen left their villages and volunteered to join. Azi Zul Rahman (ph) hasn't seen his family in two months. "We're trying to stop the Taliban and establish peace," he says.

Among the volunteers, 16-year-old Akbar Zaid. Akbar says he goes to school and wants to be a teacher, but his parents encouraged him to fight for his country first.

(on camera): You're a good fighter?

Is that right?

AKBAR ZAID: Yes.

SAYAH (voice-over): Dozens have surrendered to the lashkar, says the army. Among them, these four suspected Taliban commanders. The Pakistan Army says they keep in close contact with each lashkar -- giving them food, medical care, even ammunition if they need it. "When the government is satisfied and we're no longer needed," says Zaipan, "we'll go back home."

Until then, the Taliban will be in the crosshairs of Pakistan's lashkars.

Reza Sayah, CNN, Lower Dir, Pakistan.

(END VIDEO TAPE)

BLITZER: Let's bring back Jack for The Cafferty File.

CAFFERTY: The question this hour, Wolf, is how confident are you in the nation's financial system, which has been through a lot in the last year or so?

Rick writes from Alabama: "The economy is in much better shape than it was a year ago, but we still have a long way to go. As a small business owner, I've seen an upturn in sales and this will mean more jobs, since companies like mine will begin hiring again."

Kevin in Canton, Ohio: "The fundamentals of the economy have only gotten worse since the collapse a year ago. We have more debt, the Federal Reserve has created more inflation, we've encouraged more people to go into debt with programs like Cash for Clunkers and we've wasted more resources by propping up failed businesses. We haven't helped the situation at all. We've simply set ourselves up for a bigger bust down the road."

Mark in Boston says: "I'm confident we're going to have massive inflation, if not hyper inflation, in the near future. I see $3,000 an ounce gold, $140 a barrel oil before the end of Obama's first term. I think the Bush and Obama administrations, along with Greenspan and Bernanke, should have let the nation go through the painful withdrawal of our debt addiction rather than giving us more debt to temporarily safety that addiction."

Delia in Katy, Texas: "I have no confidence in the financial system. There have been no regulations put in place to stop this from happening again. When capitalism is allowed to work properly -- no benefits, tax benefits for business, no bailouts when they fail, then I'll feel confident."

Jonathan in Dothan, Alabama: "I'm not confident at all that we're in debt to China for billions. If they decide it's time to pay up, we are doomed."

And Donald writes from Tampa, Florida: "I'm confident as long as the government has their foot on the CEOs' throats. The market has always been about greed, but our finance people have taken this to a whole new level."

If you didn't see your e-mail here, it's because we didn't read it.

(LAUGHTER) CAFFERTY: Well, that's the bottom line. But you can go to the blog. It might be there. And if it's not there, I don't know what to tell you.

BLITZER: You mean you don't read every single one of those e- mails?

CAFFERTY: I can't. I'm -- I'm only one person.

BLITZER: Yes. But you've got a staff.

CAFFERTY: We get thousands. I don't have a staff...

BLITZER: You have people.

CAFFERTY: I have Sarah. I've got one...

BLITZER: Yes.

CAFFERTY: I've got one staff.

BLITZER: She's like people.

CAFFERTY: Yes, she is like people. But there's thousands of e- mails -- thousands.

BLITZER: But they're good.

CAFFERTY: Well, they are -- a lot of them are good.

BLITZER: (INAUDIBLE).

CAFFERTY: Yes.

BLITZER: And Sarah is terrific.

CAFFERTY: She is, yes.

(CROSSTALK)

CAFFERTY: She and the people who write to me are the reason this works. I'm just the faucet through which this stuff passes. Works.

BLITZER: I know exactly how you feel.

Thank you.

CAFFERTY: Have a good weekend.

BLITZER: You too, my friend.

CAFFERTY: Are you going back to Washington?

BLITZER: I am.

CAFFERTY: Good. BLITZER: I hope that plane takes off.

CAFFERTY: I don't mean good you're going back.

BLITZER: What do George Clooney and Rafael Nadal have in common?

Here's a hint -- it's Moost Unusual.

Also, a soldier in Afghanistan at a ceremony to mark the anniversary of the 9/11 terror attacks -- one of our Hot Shots on this day.

(COMMERCIAL BREAK)

BLITZER: Fredericka Whitfield is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Fred, what's going on?

WHITFIELD: Well, Wolf, poor weather in Central Florida is forcing astronauts aboard the Space Shuttle Discovery to stay in space longer than planned. The shuttle has been waved off from two possible landing times at the Kennedy Space Center in Florida today. The shuttle is now scheduled to land at Edwards Air Force Base in California tonight. Weather also prevented the shuttle from landing yesterday.

And British riot police separated rival groups at a London mosque today. Anti-Muslim protesters outside the mosque clashed with a group that came to show support for the Muslim community. Some of the protesters threw sticks and stones. At least eight arrests were reported.

An anti-abortion activist was shot and killed outside a Michigan high school, as students and parented watched in horror. Officials say the 63-year-old man was demonstrating across the road from the school when a man drove by and fired at him. A suspect is in custody. Police say they believe he allegedly shot the activist because he was offended by graphic anti-abortion pictures displayed across from a school.

And a concert to honor Michael Jackson set for this month in Vienna, Austria has been postponed and moved. Jermain Jackson, who is organizing the concert, says that it will now be held next June in London. He says many of the stars invited to attend need the extra time to change their schedules.

And the first lady says let's make a deal. Michelle Obama is challenging students at George Washington University in the nation's capital. If they perform 100,000 hours of community service over their school year, the first lady will speak at their graduation next year. Both the first lady and President Obama have pushed for more young people -- and others, of course -- to contribute in their communities -- Wolf.

BLITZER: I think the G.W. students will do it, if I know G.W., and I do. Thanks very much.

WHITFIELD: They are high achievers.

BLITZER: They certainly are...

WHITFIELD: They'll meet the goal.

BLITZER: ...good young people.

Here's a look at some Hot Shots.

In Florida, a woman smiles as she takes the oath to become a United States citizen.

In Afghanistan, a soldier puts his head in his hands during a 9/11 ceremony.

In India, a rickshaw puller covers himself with a plastic sheet as he waits for customers in the rain.

MOOS: ...dancing suggestively on Conan O'Brien's desk. This, on the other hand, may actually have been a real fan. He got arrested for running onto the court to kiss tennis star Rafael Nadal at the U.S. Open Tuesday night.

(BEGIN VIDEO CLIP)

RAFAEL NADAL, PROFESSIONAL TENNIS PLAYER: The guy was really nice. He -- he said, "I love you" and he kissed me.

(END VIDEO CLIP)

MOOS: And though George Clooney likewise laughed, he put down his interloper.

CLOONEY: It's always embarrassing when you take one real swing for the fences and it just falls flat. MOOS (on camera): But the Italian reporter didn't think the joke fell flat. He thought it was a great success -- that only one other outcome could have been better.

CASCIARI: The moral would have been if George would have kissed me in the mouth.